European Markets Rebounded From Early Weakness

(RTTNews) - The European markets bounced back from weakness in early trade Wednesday and finished the day in positive territory. The situation in Syria remains a concern among investors. However, with the U.S. Congress still on recess, a U.S. strike would not come until next week at the earliest, since President Obama has decided to seek congressional approval. The positive performance of the U.S. markets provided a boost to Europe in late trade.

Following a meeting with President Barack Obama at the White House on Tuesday, House Speaker John Boehner and House Majority Leader Eric Cantor both said they would vote to approve a resolution authorizing military action in response to the Syrian government's alleged use of chemical weapons against civilians. Boehner expressed support for Obama's call for military action and urged his colleagues to do the same.

House Minority Leader Nancy Pelosi also argued that it is in America's national interest to respond to the Syrian government's alleged use of chemical weapons.

Investors will also be watching for the release of the Beige Book later today for any clues it may contain regarding the Federal Reserve's plans to taper its stimulus measures. Investors will also be watching for interest rate decisions from both the European Central Bank and the Bank of England on Thursday.

European Central Bank Executive Board member Joerg Asmussen said Wednesday that the forthcoming stress test, which will be part of a comprehensive assessment of the banks under direct supervision of the ECB, is Eurozone's third and last chance to restore confidence in the region's banking system.

"Two stress tests have failed for various reasons in restoring confidence in the European banking sector. This will be our third and final chance," he said in Frankfurt. The comprehensive assessment includes asset quality review, stress test and risk assessment.

Asmussen expects the European Parliament to approve a bill on joint banking supervisory body of national supervisors and the ECB, next week. He said a rigorous audit examination before the joint supervision can strengthen confidence in the banking sector.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.19 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.37 percent.

The DAX of Germany climbed by 0.19 percent and the CAC 40 of France advanced by 0.16 percent. The FTSE 100 of the U.K. rose by 0.10 percent and the SMI of Switzerland gained 0.18 percent.

In Frankfurt, Lufthansa declined by 2.97 percent. SAP and MunichRe fell by 1.62 percent and 1.10 percent, respectively.

ProSiebenSat.1 Media dropped by 4.99 percent. The holding company of the broadcaster decided to trim its stake in the media group to 33 percent from the earlier 44 percent.

Wacker Chemie finished lower by 0.26 percent, despite a broker upgrade at JPMorgan.

Siemens rose by 1.08 percent, after Exane BNP upgraded the stock to ''Outperform'' from ''Neutral.''

WireCard climbed by 2.73 percent, after Goldman Sachs upgraded the stock to its ''Conviction Buy List.''

In Paris, STMicroelectronics declined by 1.28 percent. Michelin decreased by 0.68 percent and Carrefour lost 0.49 percent.

In London, Ryanair sank by 11.17 percent after issuing a profit warning. Peer easyJet dropped by 5.08 percent and International Consolidated Airlines fell by 1.26 percent.

Deutsche Bank upgraded ARM Holdings to ''Buy'' from ''Sell.'' The stock finished lower by 1.02 percent.

Nokia advanced by 0.50 percent in Helsinki, following broker upgrades.

Delhaize decreased by 7.48 percent in Brussels, after the company named a new chief executive.

The euro area economy exited its longest recession on record as initially estimated during the quarter ended June, second estimate from Eurostat showed Wednesday. Gross domestic product expanded 0.3 percent quarter-on-quarter, in line with flash estimate. The contraction for the first quarter was revised down to 0.2 percent from 0.3 percent.

Retail sales in Eurozone increased less than expected in July, the latest data from Eurostat revealed Wednesday. Sales rose 0.1 percent in July from a month earlier compared with forecast for a 0.2 percent growth. This followed a 0.7 percent decline in June.

The Eurozone private sector expanded at the fastest pace in just over two years, but the rate of growth was slightly weaker than initially estimated in August, final survey data from Markit Economics showed Wednesday.

The composite output index rose to 51.5 in August from 50.5 in July. The final reading was slightly below the flash estimate of 51.7.

The services Purchasing Managers' Index increased to 50.7 from 49.8 in July. The earlier flash estimate for August was 51.0.

Activity in the German private sector economy increased for the fourth successive month in August, and to a larger extent than estimated earlier, final data from a survey conducted jointly by Markit Economics and BME showed Wednesday.

The seasonally adjusted composite output index, a measure of activity in the manufacturing sector and the service sector, rose to a seven-month high 53.5 in August from 52.1 in July. The preliminary estimates were for a score of 53.4.

France's domestic producer prices increased from last year in July, contrary to economists' expectations for a modest decline, latest data showed Wednesday. The producer price index for the domestic market increased 0.3 percent on an annual basis in July, statistical office Insee said. Economists had forecast prices to decrease by 0.2 percent.

Business activity at French service sector firms contracted the least in one year, despite a faster decline in incoming new work, detailed results of a survey by Markit Economics showed Wednesday. The business activity index, which measures the health of the service sector, rose to a 12-month high of 48.9 in August from 48.6 in July. The preliminary report showed a lower reading of 47.7.

The British services sector expanded further in August, and at the fastest pace in more than six-and-half years, helped by a surge in new business, data from a survey by Markit Economics and BME showed Wednesday. The seasonally adjusted purchasing managers' index for the service sector advanced to 60.5 in August from 60.2 in July. Economists had forecast the index to decline to 59.7.

Overall shop prices in the United Kingdom declined 0.5 percent in August, the British Retail Consortium reported Wednesday. The rate matched the 0.5 percent decline reported for July.

After reporting the smallest U.S. trade deficit in over three years in the previous month, the Commerce Department released a report on Wednesday showing that the trade deficit widened in July. The report said the trade deficit widened to $39.1 billion in July compared to a revised $34.5 billion deficit in June.

Economists had expected the deficit to widen to $39.0 billion from the $34.2 billion originally reported for the previous month.